Confectionery: Russia

Innova Market InsightsMarch 2009

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Presentation Scope This presentation focuses on new product launches in Russia in the

chocolate and sugar confectionery categories.

Confectionery Market Analysis All Categories

Chocolate-Product Launch Activity-Top Companies-Flavour Analysis & Trends-Positioning Analysis

Sugar Confectionery-Product Launch Activity-Top Companies-Flavour Analysis & Trends-Positioning Analysis

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Confectionery Market Analysis

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Chocolate

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Chocolate Product Launch Analysis

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Top 15 Companies

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Top 15 Companies: Chocolate product launches tracked by Innova (2005-2008)

SLADCO GROUP 54 KRAFT FOODS INC 24 MARS INC 18 POBEDA CONFECTIONERY FACTORY 17 KONTI PRODUCTION ASSOCIATION 17 LANDRIN CONFECTIONERY FACTORY 15 FERRERO POLSKA SP ZOO 14 NESTLE SA 14 KRASNY OKTYABR 12 ROSHEN CONFECTIONERY CORP 11 ALFRED RITTER GMBH & CO KG 11 KRUPSKAYA CONFECTIONERY FACTORY 11 BABAYEVSKY CONFECTIONERY CONCERN JSC 10 VOLSHEBNITSA CONFECTIONARY FACTORY 10

SladCo Aerated Milk Chocolate Bar

Top 15 Flavours Chocolate

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Trend: Nuts Are A Prominent Feature

20% of chocolate product launches contained nuts, the top nut being hazelnut (10%), followed by almond (5%).

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Twix Mindalix - Mini Milk Chocolate Biscuit Sticks with Caramel-Almond Filling

Swiss Delice Milk Chocolate with Pecan Nuts & Crunchy Caramel Pieces

Snickers Chocolate Bars with Caramel, Roasted Peanuts, and Nougat Filling 

Trend: Keeping Hazelnuts Whole

Whole hazelnuts promoted for extra crunch and texture.

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Cadbury Milk Chocolate with Whole Hazelnuts

Vdohnovenye Chocolate Praline with Mandarin Crisp & Whole Hazelnuts Vival Coconut Sweets with Whole Hazelnut in

Chocolate Glaze

Rainford Millennium Gold White Chocolate with Whole Hazelnuts

Trend: Orange Is Fruit Of Choice

Orange is the favourite fruit flavouring- in 2% of launches.

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Fazer Geisha Orange Dream Milk ChocolateRussia Generous Soul Zolotaya Marka - Orange Flavored Dark Chocolate with Almond Praline 

M&M's Orange and Cream Taste Chocolate

Secondary Flavours

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Trend: Cherry Is The Red Flavour Of Choice

Other countries may favour strawberry, but cherry is Russia’s favourite.

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  Kraft Milka Milk Chocolate with Cherry and Cream Filling. No preservatives and artificial flavors.

Twixels Mini Biscuit Sticks with Caramel and Cherry-Curd Flavour, Covered with Milk chocolate

Russia Generous Soul Zolotaya Marka - Cherry & Rum Flavored Dark Chocolate Filled with Almond Praline

Astoria Golden Velvet - Premium Dark Chocolate with Cherry and Cognac

Trend: Fusing With Alcohol

Alcohol flavours increase indulgence factor for chocolate.

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  Nestle Komnalpo: Sweets Filled with Mango, Orange & Cognac

  Babaevsky Chocolate with Pina Colada Filling  

Astoria Milk Chocolate with Pineapple & Champagne

Trend: Adding Caffeine

Coffee for flavour and also for energy.

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Black Card Gold Chocolate with Ground Coffee

Nestle Nuts Chocolate Bar - Coffee Rainford Millenium Milk Porous Chocolate with Cappuccino

Mars Chocolate with Nougat and Caramel –Coffee & lemon flavour

Trend: Adding Cereals For Crunch

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  Witor's Golden Poker Milk Chocolate Bar with Hazelnut Cream and crispies

  Alyonka Chocolate Filled with Milk and Cereals

Sun Rice Crunchy Puffed Rice and Cereals in Cocoa Cream with Whole Milk Chocolate Coating

Mishka na Severe - Milk Chocolate with Puffed Rice Cadbury Milk Chocolate with Hazelnuts and Air Rice

Trend: Adding Seeds

Sunflower and sesame seeds added for texture differentiation-also adds health element

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Vernost Kachestvu - Milk Chocolate with Sesame Seeds and Caramel

Astoria India Milk Chocolate with Spices and Sesame Seeds

Cadbury Golden Fund Vladimir - Natural Milk Chocolate with Roasted Sunflower Seeds

Trend: Aerated Adds Appeal

Creating a lighter texture with bubbles of air.

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Tender Whisper - Aerated Milk Chocolate  

Aeroshok Aerated Milk ChocolatePobeda Vkusa - Aerated Plain Chocolate Bar

Russia Generous Soul Perfection - Dark and White Air Chocolate

Not So Extreme Flavours For Russia

Russia has not yet adopted flavour trends sweeping Western Europe in the chocolate category, such as chilli, superfruits & herbs.

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Vernost Kachestvu - Dark Chocolate with 60% Cocoa and Jasmine Green Tea

Babayevsky Original Chocolate with Cinnamon

Alpen Gold Milk Chocolate with Peanut & Corn Flakes

Dark Chocolate with Yogurt-Garden Berry Filling

Positioning Analysis: 2005-2008

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Top 10 Positioning Categories Products Launched in (%)Indulgent and Premium 42No Additives/Preservatives 15Novel and Fun 13Children (5-12) 13Convenience 7Traditional 3Ethical 2Seasonal/In-Out Products 2Kosher 2Allergy 1Total 100

Functional Chocolate?

Russia has yet to embrace functional chocolate, but some health inroads have been made.

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Alenka Much Milk + Calcium Chocolate Bar. Milk chocolate bar with added milk and calcium.

  Russian Products Golitsin–Sugar Free Milk Chocolate with Peanut.

Witor's Gianduia Milk Chocolate Bar with Whole Hazelnuts . No preservatives, colors and flavors.

Shugaroff Confectionary – Sugar Free Milk Chocolate with Almond

Sugar Confectionery

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Sugar Confectionery Product Launch Analysis

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Top 10 Companies

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Top 10 Companies Sugar Confectionery product launches tracked by Innova (2005-2008)

PERFETTI VAN MELLE SPA 55 CHUPA CHUPS SA 11 MARS INC 7 DIROL CADBURY LTD 7 NESTLE SA 7 KONDITERSKAYA FABRIKA KAMSKAYA 4 NESTLE CESKO SRO 4 SLADCO GROUP 4 KATJES FASSIN GMBH & CO KG 4

  Perfetti Van Melle Chupa Chups Fruit Mix Assorted Lollipops

Top 15 Flavours Sugar Confectionery

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Not surprisingly,fruit flavours dominate, with strawberry, orange and lemon being popular varieties.

Examples of emerging fruit flavoursare grapefruit and melon.

Flavour derivations, for example, Sicilianorange are newflavour trends.

Strawberry Is Top Choice

20% of sugar confectionery products launched were strawberry flavoured, however new adventurous berry flavours are challenging conventional strawberry.

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Bon Pari Hard Candy: Wild Berry Flavor Katjes Disney Mickey Mouse Funny Fruit Jelly Sweets - Cola-Berry. Contains bilberry juice.

Bon Pari Hard Candy - Berry.

Citrus Alternatives

Traditional orange and lemon flavours can be replaced with more adventurous flavours and other fruit varieties such as melon.

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Bon Pari Hard Candy: Orange, Sicily Orange, Grapefruit & Lemon Flavour

Aro Jelly Chews with Melon Flavour Bon Pari Fruit Sugar Candy - Lime

Apples For Freshness

3% of products launched had red apple flavour. Green apple is also proving to be popular. Apple used as a flavour has a fresh appeal.

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Mentos Chewy Drageees - Apple Mix

Chupa Chups Nano Chups - Apple Flavored Lollipop Katjes Chewy Sweets - Sour Apple

Colia Fruit C Fruit Candies - Green Apple

Positioning Analysis: 2005-2008

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Top 10 Positioning Categories Products Launched in (%)

Children (5-12) 37

Novel and Fun 33

Sugar Free 9

No Additives/Preservatives 7

Convenience 3

Low Fat 3

Vitamin/Mineral Fortified 2

Natural 2

Functional, not specified 2

Low Calorie 2

Total 100

Sugar Free

Sugar free is the top health positioning, with 9% of products claiming to be sugar free.

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Rondo Sugar Free Mint Flavored Sweets

 Orbit Drops Sugar Free Dental Candies - Peach  

Mentos Plazma - Fresh Mint Candies. Sugar free candies with green tea extract and fresh mint taste.

Smint White Sugar Free Fresh Dragees

Going Natural

Natural (2%) and no additives/preservatives (7%) claims are emerging. Both these positionings should experience growth.

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Fruittella Crunchies Cherry, Strawberry, Apple,Orange, Lemon and Raspberry Flavored Fruit-Crunch Chewy Candies. No preservatives and artificial flavors!

2C Samy Super Natural Mix from Nuts, Fruits, and Berries with Sugar. Natural. No preservatives and additives.

Matyach Kukuruzka - Corn Sweet Snacks. No additives and preservatives.

Rot Front Dragees with Pineapple Flavor. No preservatives.

Combining Health With Pleasure

Adding vitamins and minerals for health is a newtrend- 2% of products havea vitamin/mineral fortified positioning.

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Mentos+ Vitamin C Pink Grapefruit, Acerola & Cassis Flavored Dragees

Fakel Dizain Coconut Hematogen Candy Bar with Vitamin C  

  Fruittella Plus Chewy Sweets - Strawberry-Yogurt Flavor. Enriched with calcium and vitamins.

Bon Pari Crystal Fruit Candies with vitamin C.

Conclusion

Chocolate (63%) product launches tracked by Innova, dominate the confectionery category in Russia, followed by sugar confectionery (20%) for the period 2003-2008.

The chocolate category has yet to embrace functional trends seen elsewhere in the world. This is also true in regard to flavours. Flavours are not so adventurous, with the use of nuts, cherry and orange as predominant flavour choices. Adding cereals to chocolate and “aerated” choices are current trends.

The sugar confectionery category is starting to see some more interesting flavours, to traditional, conventional flavours with fruit flavour derivations emerging. There are minimal functional products available, products fortified with vitamins and minerals seem to be the extent of functionality currently on the market in Russia.

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